Options Point To Further Upside For Beer Brewer Ambev

  Today’s tickers: ABV, SYY & RDEA ABV  - Ambev –  Stocks across the board are selling off today on renewed European concerns and disappointing data points out of China and Europe, but the pullback appears not to have deterred some optimism in options on the world’s fourth-largest brewer, Ambev. The sizable options play on ABV, which is majority-owned by Anheuser-Busch InBev, suggests the strategist is positioning for shares in the name to hit new all-time highs by May expiration. The transaction this morning looks nearly identical to a spread initiated on Ambev on Friday afternoon when the stock touched a record high of $44.63. Shares in the distributor of Stella Artois and Beck’s in Latin America are down 2.6% this afternoon to stand at $43.04 as of 12:25 p.m. in New York. The options trades established this morning and on Friday reduce the cost of upside exposure to the stock ahead of the brewer’s first-quarter earnings report next week. The transaction this morning involved the sale of 3,000 puts at the May $39 strike against the purchase of the same number of calls at the May $48 strike for a net credit of $0.10 apiece. Friday’s trade, the sale of 3,000 May $40 strike put options against the purchase of 3,000 May $48 strike calls, was initiated at zero cost to the trader. The investor responsible for the trade this morning keeps the full $0.10 net credit as long as shares exceed $39.00 through expiration while additional profits are available to the upside should the stock surge 11.5% to top $48.00. SYY  - Sysco Corp. –  Food distributor, Sysco Corp., popped up on our ‘hot by options volume’ market scanner this morning after a large number of put options were purchased in the front month. The influx of…

 

Today’s tickers: ABV, SYY & RDEA

ABV - Ambev – Stocks across the board are selling off today on renewed European concerns and disappointing data points out of China and Europe, but the pullback appears not to have deterred some optimism in options on the world’s fourth-largest brewer, Ambev. The sizable options play on ABV, which is majority-owned by Anheuser-Busch InBev, suggests the strategist is positioning for shares in the name to hit new all-time highs by May expiration. The transaction this morning looks nearly identical to a spread initiated on Ambev on Friday afternoon when the stock touched a record high of $44.63. Shares in the distributor of Stella Artois and Beck’s in Latin America are down 2.6% this afternoon to stand at $43.04 as of 12:25 p.m. in New York. The options trades established this morning and on Friday reduce the cost of upside exposure to the stock ahead of the brewer’s first-quarter earnings report next week. The transaction this morning involved the sale of 3,000 puts at the May $39 strike against the purchase of the same number of calls at the May $48 strike for a net credit of $0.10 apiece. Friday’s trade, the sale of 3,000 May $40 strike put options against the purchase of 3,000 May $48 strike calls, was initiated at zero cost to the trader. The investor responsible for the trade this morning keeps the full $0.10 net credit as long as shares exceed $39.00 through expiration while additional profits are available to the upside should the stock surge 11.5% to top $48.00.

SYY - Sysco Corp. – Food distributor, Sysco Corp., popped up on our ‘hot by options volume’ market scanner this morning after a large number of put options were purchased in the front month. The influx of…
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